In their own words. (Alberto Fujimori)

Jul 1, 1998

Alberto Fujimori, President of Peru
In 1990, a little-known agronomist and university rector with
no prior political experience, Alberto Fujimori, surprised
observers and was elected to the presidency of Peru. Since
then, he has guided his country through eight years of economic
reforms and not a little political controversy. Chosen as
LatinFinance's "Man of the Year" in 1994 for his role in
turning around Peru's economy, President Fujimori recently sat
down with LatinFinance in Lima's downtown Palacio de Gobierno
to discuss a decade of transformations in Peru and the region.
What was it that made you go into
politics?
Ten years ago, I saw economic instability, the lack of a future
for Peru, uncertainty everywhere. At one point, the situation
was so bad that we even thought of the possibility of
emigrating. I also had a construction business at that time and
while the business had been doing well at one point, inflation
was very bad and we had to close it down. You could see that
the country was on the verge of collapse.During 1988, I hosted
a television program in which guests debated various
issues-national politics, economic questions, social issues,
etc. And it was at that point I began considering going into
politics. That decision came later, but when I did decide I
opted not just to get into politics but to go after the
presidency of the country. Your election came just as real change was happening
in Latin America's economies. What do you see as the key points
in the region's transformation?
First, the speed of the reforms and the opening in Argentina
were remarkable. The rest of us looked at the privatizations
there at the time and thought the speed at which it was done
was just crazy. And then there have been all the economic
successes that Chile has had. Clearly, they had to surmount
obstacles and it may have been easier to do that because of the
size of the economy, but it was really amazing what they
managed to do.I think that here in Latin America, Chile gave
the example, Argentina laid out the guidelines and then Peru
was able to begin opening its economy-it's been a series of
successive stages that have caught on throughout the region.
That progression also corresponds precisely to the
spread of the private pensions model throughout the
region.
First it was adopted in Chile, then later Argentina and it
spread to Colombia and Venezuela and Peru. The pension systems
have provided a considerable boost to our economies. Here in
Peru, it now accounts for nearly $1.8 billion. That was
inconceivable when it was first talked about, and as a result
has overshadowed all the original cynicism and criticism.In
addition, privatization has generated an impressive amount of
resources which have gone to strengthening the reserves held by
the central bank. And it has also allowed us to channel nearly
$1 billion to the private pension system.Our banking system has
begun to improve, to become more transparent and be managed by
those who have proven capable of properly managing it.
Everything was privatized-the entire financial system. It is
still not as competitive as it could be, but there have been
important advances throughout the financial sector. And the keys to Peru's transformation?
First, I think that the orientation we have given our handling
of the economy has been key. There isn't a single moment,
unless one would want to single out August 1990, when we
decided to lift price controls. But from that point on, we
began to stabilize the economy, to work closely with the
multilateral agencies and to follow a strategic economic
program.It wasn't just the economic aspect, or the financial
aspect where we had problems that were inhibiting our advance.
A second problem was terrorism. In order to deal with the
terrorism, we first had to develop our military and police
intelligence services. Then there was a third event, which was
my re-election in June 1995, and that allowed us to continue
the stabilization and reform process. Any regrets about the amount of force you have used to
combat terrorism?
If I have any self-criticism in this regard, I think it is that
I did not use enough force. Rather, we used the force of
society and the intelligence services of the state apparatus in
order to capture the terrorists. In those places where we were
required to use force in order to confront the terrorists, we
used force. But it was always a well thought-out strategy.There
were isolated cases of violent clashes. But previously that had
been the main strategy of the armed forces for an entire
decade. During the 1980s, the armed forces were accustomed to
entering villages, closing the place off and wiping out the
entire population. That's how they did it. When I took office,
things changed. My government knew that in order to fight
against terrorism it was necessary to win the confidence of the
population.A lot of people thought this country couldn't be
saved from terrorism. Let me tell you something that I
discussed once with Enrique Iglesias. At a meeting of heads of
state, I told him, "I am going to end terrorism in Peru." And
he replied, "Very good. I wish you the greatest success." A few
years later I saw him after the capture of (Sendero Luminoso
leader) Abimael Guzman, and he said to me, "Well done, well
done. You know, I told you that I wished you all the best in
your fight against terrorism...but I never really thought you'd
be able to do it!" Who do you see as the individuals most responsible for
the region's transformation?
At a regional level, it would have to be Michel Camdessus. The
International Monetary Fund has given our economies a
certification as a kind of "guarantee" that permitted us to
have access to other financial markets. To ask for financing,
one had to go with a letter in hand from the IMF, and if you
didn't have it, you simply didn't bother going. They wouldn't
even open the door to you, that's how important the IMF
certification was.Enrique Iglesias has really helped the region
a lot through the Inter-American Development Bank, first in the
form of credits for economic restructuring and later with
credit for social programs and infrastructure. How important was the Brady debt restructuring for
Peru?
Debt has been one of the biggest problems facing Peru. It was
really a burden. One wouldn't have known where to begin if the
country's debt problems had been spread out atop a table. You
were completely surrounded, outflanked everywhere you turned.
We had to work on it like ants, little by little. I remember we
started with the World Bank and the Inter-American Development
Bank to straighten out our situation with them. Then we struck
our first deal with the Paris Club, followed by our agreement
with the International Monetary Fund. We left the Brady Plan to
the end. We were the last country to sign. Because of the size of Peru's debt
problem?
Because of the size and because we were dealing with so many
other problems, too. In the end, I think we negotiated very
good, very satisfactory conditions under the Brady Plan both
for Peru and for the bankers. I believe the reason Peru's
economy did not simply collapse is due to the success of the
Brady Plan.Were there any moments in the renegotiation of
Peru's debt that were particularly tense?I remember during the
Brady negotiations there was one meeting with Citibank and John
Reed was there. They were in the middle of talks and Finance
Minister Jorge Camet said that no, it just wasn't possible to
reach an agreement yet. And Reed got very upset and stormed
away and Camet stayed on talking with the other bank officials.
But eventually, Reed had to return to the table, and ended up
understanding the Peruvian position. Why was your re-election really necessary to continue
Peru's economic reforms?
Well, the re-election was a decision taken by the citizenry.
The idea at that point was that if the people wanted continuity
they would have to vote for it. And really, it was the people
who said, "Yes."Let me say that back in 1992, democracy in Peru
was at serious risk because of terrorism. Peruvian democracy
was nearly unsustainable at the time and if drastic measures
would not have been taken, the government might well have
fallen. It was said at the time that democracy was being
destroyed, but measures were taken in order to maintain the
state and get the country back on the track toward democracy.In
the march toward democracy there is always a lot of
controversy, and if there is controversy it is proof that there
is democracy. We have advanced and nobody doubts today that our
institutions are more solid. We don't deny that there is room
for improvement, but in general the institutions of government
are moving forward. There is currently some controversy about your running
for a third term, isn't there?
There is a lot of talk about changing election laws. But all
that is up to the legislative branch of government. There is
also a lot of criticism that I am trying to run for a third
term as president. First of all, I would have to be a
candidate, which I am not yet; then, the laws being proposed in
Congress would have to allow me to run; and in the last
instance, if I do prove to be a candidate, the people will
decide what happens in an election. When will we know if you're going to be a
candidate?
I am a very unpredictable man. I think that's a personal
characteristic of mine. Although there are some areas in which
my work is very strategically planned, in other areas that's
not so. When I presented myself to run for the presidency in
1990, I did it with only a few months to go before the
elections, very little time. Nevertheless, the operation of the
rescue of the hostages at the Japanese embassy was a long time
in planning. Does Peru need a three-term president in order to
continue with its economic transformation?
The reforms can be deepened with the continuity of one
government or of more than one government. I think what is
necessary is the concept of continuity in politics, rather than
uncertainty in politics.

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